Clinton writes off campaign debt to herself

Michael Falcone, New York Times

Published
4:00 am PST, Tuesday, December 23, 2008

Having spent more than a year on a failed effort to win the Democratic presidential nomination, Sen. Hillary Rodham Clinton has officially recognized the multimillion-dollar toll that the campaign took on her personal assets.

Clinton filed papers with the Federal Election Commission over the weekend formally writing off all of the $13.2 million she lent the campaign, plus $77,900 in interest on the loan.

Her giving up any hope of reclaiming the money, a step signaled in September when the statutory deadline passed for recouping all but a small piece of it, confirms the financial strain that the fundraising juggernaut of the Obama campaign placed on Clinton personally.

And in addition to the personal loan, the same weekend filing showed that she still owed millions of dollars to dozens of vendors as of Nov. 30. She did manage to chip away at that debt in November, reducing by roughly $1.1 million the $7.5 million she owed at the end of October. The single biggest debt as of November's end was $5.4 million, to the firm of Mark Penn, her former chief strategist.

The shadow of her debt has hung over Clinton since she ended her campaign for the nomination in June. The Clintons have held a series of fundraisers to try to pay it off, and President-elect Barack Obama also has been urging his supporters to help out with contributions.

Clinton even recruited her mother, Dorothy Rodham, to the cause. In early December, Rodham sent an e-mail message to supporters urging contributions to help retire her daughter's campaign debt and offering an autographed children's book about Clinton in exchange for a donation of $250 or more.

Now, nominated to be secretary of state, Clinton has been dealing with additional finance-related complications. Former President Bill Clinton already has disclosed a long list of donors to his charitable organizations, making his international dealings more transparent and thus meeting a condition set by Obama for his selection of Hillary Clinton.

If Clinton is confirmed as secretary of state, her ability to raise money to pay off her campaign debt will be sharply restricted. Provisions in federal law could keep her from personally soliciting contributions at all, leaving the job to her presidential campaign committee.

Kenneth Gross, a campaign finance lawyer, said that although Clinton cannot simply walk away from the remaining debt, she is not under a strict deadline for paying it off. Still, he said, carrying the multimillion-dollar burden with her as she begins her new job would be unpalatable, at the very least.

"It weighs on you," Gross said. "It's not going to debilitate her in any way from functioning as secretary of state, but it's a cloud that she would like to make go away."

Clinton and her husband have amassed significant wealth since leaving the White House. The couple has reported earnings of $109 million during the period, mostly from Bill Clinton's paid speeches.